Since the VA funding fee is deductible as mortgage insurance, in full when the loan is made, it should be fine to add it to the 1098 interview, since Turbotax does not provide a separate place to enter mortgage insurance.
Another option would be to enter it separately. When I bought my house recently, the loan was made by "ABC home lenders" and sold to "XYZ bank". The 1098 came from XYZ bank and did not include the daily interest I paid from the date of closing to the end of the month, or the property tax adjustments that were shown on my closing statement. So I entered the 1098 for XYZ bank, and the listed a second lender as ABC bank and reported the closing interest and property tax adjustment (and checked the box for "I did not get a 1098 from this lender"). If your situation is similar, you could list the closing interest adjustment and tax adjustment, along with the VA funding fee, as a separate lender.
